There may finally be some good trade news for U.S. agriculture following the recent escalation in a threatened tariff trade war with China and ongoing uncertainty in the final outcome of current “renegotiations” of the North American Free Trade Agreement (NAFTA).
Ironically, it rests in the possibility that the Trump administration is considering rejoining the Trans-Pacific Partnership (TPP), a 12-country trade agreement that President Trump pulled the U.S. out of in the first week of his presidency in January 2017, according to Michigan Farm Bureau Livestock Specialist Ernie Birchmeier.
The TPP, finalized in February 2016 but not ratified by the U.S. before Trump withdrew the United States’ signature from the pact, is now the Comprehensive and Progressive Trans-Pacific Partnership CPTTP and involves the other 11 original TPP countries.
“Ratification of the CPTPP is expected this spring, and the trade partners could consider adding new members not long after,” Birchmeier said. “There are few differences between the TPP the U.S. signed and the CPTPP, so if the U.S. were to become a member, it would be viewed as a significant win for U.S. agriculture.”
According to the American Farm Bureau Federation’s projections under TPP, annual net farm income would have jumped by $4.4 billion, driven by an increase of direct U.S. agricultural exports of $5.3 billion per year upon full implementation of the agreement. It is estimated that increased market prospects for U.S. farmers would have added more than 40,100 jobs to the U.S. economy.
Eliminating tariffs and other barriers on United States’ agricultural products going into countries party to the CPTPP – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – would have increased trade for a range of U.S. agricultural products, including beef, pork, fruits and nuts, vegetables, soybeans, poultry, dairy, rice, cotton and processed food products.
“It’s critical to remember that CPTPP is a multi-lateral agreement intended to create high-quality rules and market access for all of its members,” Birchmeier said, adding that, other member-countries are already negotiating and implementing bilateral agreements without waiting for the U.S. to complete action.
“U.S. failure to join CPTPP will not see our trade situation stay the same, but will actually lead to additional declines in net exports and desperately needed market share in important markets,” he said.
CPTPP Projections in the U.S.